(Alliance News) - South32 Ltd on Monday reported that production at its operations was mixed as it battled against mounting inflationary pressures, forcing the miner into a scramble to keep costs under control.
Despite a tough operational environment, the Perth-based diversified mining group also said it had left annual production guidance unchanged across all operations.
Chief Executive Graham Kerr said the mining group remained focused on driving cost performance to mitigate industry-wide inflationary pressure.
During the quarter, the company started a review that is expected to deliver a reduction in expenditure across its operations and functions in 2024 and 2025.
"With macroeconomic conditions creating headwinds for many of our commodities, we remain focused on driving operating performance and cost efficiencies," Kerr said.
Shares in South32 slid 2.2% to ZAR39.27 on Monday morning in Johannesburg, and were down 2.7% to 168.80 pence in London.
For the first quarter that ended September 30, payable copper output fell by 16% to 16.0 million tonnes from 19.0 million tonnes in the first quarter last year. Against the fourth quarter to June 30, production was down 7.5% from 17.3 million tonnes.
Silver rose by 23% to 3,375 ounces in the first quarter from 2,748 ounces in the same period last year, but was 4.2% lower than 3,522 ounces in the fourth quarter.
The company said alumina production inched up 3% to 1.29 million tonnes versus 1.25 million tonnes, as Brazil Alumina recovered from temporary port infrastructure outages, while Worsley Alumina completed planned calciner maintenance. Production was 3.2% lower than 1.25 million tonnes in the fourth quarter.
Aluminium output also expanded by 3% to 288,000 tonnes annually from 279,000 tonnes. Quarter-on-quarter, it was marginally 0.7% lower from 286,000 tonnes.
Manganese ore output was up 4% to 1.52 million tonnes year-on-year from 1.46 million tonnes, with a quarterly record at South Africa Manganese and a strong start to the year at Australia Manganese. Production in the fourth quarter was 1.45 million tonnes, up 4.9% compared to the first quarter.
Payable lead output increased by 16% to 28,500 tonnes year-on-year from 24,600 tonnes, and was 0.l7% lower from 28,300 in the fourth quarter.
Nickel production declined by 14% to 8,300 tonnes on an annual basis from 9,600 tonnes. It fell sharply by 19% from 10,200 tonnes in the fourth quarter.
Metallurgical coal production was at 1.04 million tonnes in the first quarter, 18% lower than 1.27 million tonnes in the first quarter last year. Output plunged 31% from 1.50 million tonnes in the fourth quarter.
Zinc output was down 6% to 13,200 tonnes from 14,000 tonnes in the three months last year, and was 19% lower from 16,200 tonnes in the fourth quarter.
South32 kept its 2024 financial year guidance unchanged for all operations.
Alumina production at Worsley is guided to 4.00 million tonnes in 2024, from 3.83 million tonnes in the 2023 financial year. The 2025 forecast is also at 4.00 million tonnes. In 2022, output was 3.99 million tonnes.
Brazil Alumina production is estimated at 1.40 million tonnes in 2024 and 1.42 million tonnes in 2025 from 1.26 million tonnes in 2023. Production was 1.29 million tonnes in 2022.
Hillside aluminium production rose to 719,000 tonnes in 2023 from 714,000 tonnes in 2022. Output is forecast to be 720,000 tonnes in both 2024 and 2025. Mozal aluminium output climbed to 345,000 tonnes in 2023 from 278,000 tonnes in 2022. It is guided to rise to 365,000 in 2024 and 372,000 tonnes in 2025.
Payable copper production is expected to drop to 67,000 tonnes in 2024 before rising to 71,000 tonnes in 2025. Copper output was 70,700 tones in 2023, up sharply from 25,300 tonnes in 2022.
Total coal production was 6.52 million tonnes in 2023, slightly higher from 6.50 million tonnes in 2022. Output is expected to amount to 5.00 million tonnes in both 2024 and 2025.
Metallurgical coal production is likely to drop from 5.49 million tonnes in 2023, to an estimated 4.40 million tonnes in 2024 and 4.70 million tonnes in 2025. In 2022, production was 5.71 million tonnes.
Manganese ore production is estimated at 2.0 million wet tonnes in 2024. Output rose to 2.1 million wet tonnes in 2023 from 2.0 million wet tonnes in 2022.
By Artwell Dlamini, Alliance News reporter
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South32 (S32)